NFL throws flag on Comcast for NFL Network discrimination

Does Comcast discriminate against the NFL Network by putting it on a pricier …

The NFL Network (NFLN) is sticking with its claim that Comcast discriminates against the sportscaster. Its 100-page statement, filed with the Federal Communications Commission on Thursday, says yet again that the cable giant harms the NFL by putting its programming on a higher-priced tier while broadcasting Comcast's own sports channels on a basic tier.

The statement comes in response to a June 20 filing by Comcast answering NFLN's original complaint. Comcast insists that the NFL Network agreed to the current arrangement. "The NFL's complaint is a blatant example of regulatory gamesmanship," Comcast wrote to the FCC in its own defense. "It is an attempt to repudiate agreements that were freely entered into by two sophisticated parties, one of which is the most lucrative and powerful sports enterprises in the world."

NFLN calls this bunk: "The act of discrimination about which the NFL Network complains is not that contract," the entertainment group writes, "but rather Comcast's subsequent action: moving the NFL Network to a digital tier for which subscribers have to pay a premium, while at the same time leaving its own national sports channels on the basic analog tier."

NFL Network wants the FCC to fix the problem by ordering Comcast to run the service alongside its own basic tier sports channels, prominent among them Versus and the Golf Channel. And NFLN wants that parity to start right away with the upcoming season.

In 1992 Congress added Section 616 to the Communications Act, which forbids a multichannel video programming distributor (MVPD) from discriminating against content providers "on the basis of affiliation or nonaffiliation" with the MVPD. NFLN invokes this law on its behalf. It charges that Comcast's "discriminatory" tiering practices have caused a "dramatic" drop in NFL Network subscribers, more selling and operating costs, and have harmed the programmer's ability to compete for advertising revenue.

Comcast's June 20 filing argues that NFL Network does not need its services and can bargain for broadcast access elsewhere. "The NFL is a sophisticated party," Comcast wrote on June 20, "with abundant expertise in bargaining, experienced counsel, and all of the other resources needed to negotiate business arrangements concerning programming that it monopolizes."

But NFLN insists that Comcast represents the monopoly in this relationship, dominating a third of all cable programming: "Comcast's unparalleled size and market reach as the nation's largest MVPD put it in a unique position to determine the success or failure of an independent programming service [italics are NFLN's]."

It's not discrimination if you suck

Comcast defends its segregation of the NFL Network in a more expensive sports tier by comparing it unfavorably to its own Golf Channel and Versus networks. Its June statement highlights what Comcast calls "just a few inconvenient truths"—that NFL Network carries an insufficient number of live, regular season games and charges a high per-subscriber license fee to MVPDs, that Cox also carries NFLN on a sports tier, that when Comcast and NFL Network cut their carriage deal, NFLN did not feature any live regular-season games (and now offers only eight each season).

"Despite its vastly smaller slate of live-event programming, NFLN charges cable operators license fees that are more than twice the fees charged by either the Golf Channel or Versus," Comcast says. "Comcast's decision not to saddle most of its customers with the high costs of the limited-appeal NFLN is eminently reasonable, and the decisions of other MVPDs further validate that choice."

NFLN's latest filing concedes that some of these assertions are true. But they don't really matter, the sportscaster asserts, because what really matters are ratings, and the NFL Network's ratings are much higher than Comcast's sports channels. "Comcast's justification for its discriminatory conduct is therefore empty and unavailing," NFLN concludes.

There's also a he said/she said going on here about whether Comcast committed the no-no of demanding a financial interest in NFL programming and made it a condition for getting access to any tier at all. NFLN says that happened. Comcast says it was the opposite: the indie sports programmer sought "equity interest" in Versus, because, according to Comcast, NFL team owners wouldn't have to share that kind of profit with NFL players in a union contract.

"The NFL is the richest and most powerful of all sports leagues with immense market power," Comcast exec Sena Fitzmaurice told reporters after NFLN submitted its filing on Thursday. "The NFL has received precisely what it bargained for and needs no government assistance." Ars suspects that this fight could go on for a while.

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Matthew Lasar
Matt writes for Ars Technica about media/technology history, intellectual property, the FCC, or the Internet in general. He teaches United States history and politics at the University of California at Santa Cruz. Emailmatthew.lasar@arstechnica.com//Twitter@matthewlasar